First Time in India: Education Loan Approval before admission for students going to the USA

Mumbai: Credila Financial Services, a subsidiary of HDFC Ltd., is a specialized education loan lender. Credila announces a special benefit to the students who plans to pursue higher studies in the USA. Credila will, underwrite the education loan application file and issue education loan Approval letters to the credit- worthy students even before their admission to the US Universities.

“Credila’s education loan approval before admission to the USA is the first ever in India!”, said Prashant A. Bhonsle, Country Head of Credila Financial Services. He continued to say, “Unless students demonstrate the sources of funds, the US Universities don’t give I-20 to the students. With Credila’s education loan approval letters, thousands of creditworthy students from India, now, will be able to fulfill their dreams of higher education in the USA”.

The Catch-22 Dilemma of US Bound Indian Students: There are severe restrictions that are based on The US Federal Immigration laws and policies on funds that an Indian student can receive at U.S. universities. Matter of fact, universities will not confirm admission unless students can demonstrate their ability to bear the cost of an American Education.

American Education and the I20
An US University can conditionally admit the student for a particular course based on various parameters, ranging from Standardized Test Scores (GRE, GMAT, etc) to Leadership Qualities. However, it does not release the official document confirming a students’ admission until and unless the student is able to demonstrate financial ability to pay for the first year of the course and continued funds to support the remaining years of education.
This official document of admission, also called the Form I20, is in fact a legal document tied to US Immigration Services. The I20 is not only the only proof of secured admission but also forms the basis of that student’s US student visa claim and attempt to enter the US for education. In a nutshell, if you don’t have an I20, you don’t go to the US for education.




Obtaining the I20
Demonstrating financial ability can be tricky, especially because only a few forms of documentary evidence are accepted by the US University. A typical Indian student has limited options - receive funding from the university in form of scholarships, waivers, etc that are extremely difficult to secure OR document family funds OR obtain an education loan. “Credila loan approval letter was one of the important financial docs which I was holding to get I20”, said Suraj T., studying in SUNY at Buffalo, USA. Another student Ajin N. who obtained education loan from Credila and studying in University of Illinois at Chicago, USA said, “Credila gave me the liquidity to go ahead with the fees payment. So the embassy was happy with loan approval letter and the way of funding for my course”.


The Chicken-Egg Syndrome
Indian Students that plan on obtaining an education loan to fund their US studies face a typical “Chicken-Egg” syndrome every year: The US University requires proof of assured funds to confirm the admission and release the I20; Indian banks do not Approval or authorize education loans until the student has confirmed admission and received the I20. So what comes first—the I20 or the bank loan authorization? Chicken or Egg?
This limitation of Indian Banks put a severe damper on several qualified students that plan on obtaining the I20 and funding their American education via loans. Unfortunately some students, out of sheer desperation, resort to unethical measures to forge such documentation which makes things worse overall. Mr. Richard Yam, Foreign Student Advisor at the University of Massachusetts, Amherst notes “We see a lot of loan approval letters that prospective students from all over the world send to us to document proof of funds. [But] I do not think I have seen anything [similar] from India.” This is echoed by Mr. Hrayr Tamzarian, Asst. Dean of International Admissions at Smith College, a highly selective private undergraduate college near Boston—“We normally accept loan letters [for I20 sponsorship] as we are very expensive and understand that the student and family may not have full funding proof and may take student loans to pay the balance fee…if the family funds plus the loan add up to the required amount, then we can issue the I20.”

Credila’s Unique Solution for students applying for studies in the USA

One of the objectives of a recent and exciting development relating to educational loans in India aims at solving this “Catch-22” situation jeopardizing the Indian student community.

Credila Financial Services, is currently India’s first and only fully-dedicated education loan provider. Credila has entered into key partnerships with various organizations and educational institutes around the globe to better serve the Indian student community. Credila Financial Services is a subsidiary of HDFC Ltd. HDFC Ltd. is a strategic investor in Credila. Over 50,000 students and parents have applied to Credila for education loan in the past few months. So far Credila has funded students for their studies in Universities such as Columbia Univ., Cornell Univ, Purdue Univ., Carnegie Mellon, Oxford etc.

Credila is offering Education Loan Approval letter to credit worthy students even before they get any confirmed admission from the USA. Credila does not mandate “Confirmed Admission” to process or grant education loan offers and Approvals. So a student can apply and receive a loan approval letter from Credila even before being admitted to the course of his/her choice. This may also help the student to secure admission to better courses. For more information, please visit www.credila.com




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